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Rich countries spend billions subsidizing their agricultural sector, leading to chronic overproduction and dumping surpluses on global markets. Poor countries demand reform of this trade practice that impoverishes small-scale farmers while enriching large agri-business.
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The EU’s Common Agricultural Policy (CAP) that subsidizes European farmers is notable because of the harm it causes to producers in the developing world. Now, Eastern European farmers, who do not receive high subsidies as their Western European counterparts, are lobbying for reform to make arrangements “more equitable”. This article highlights the many failings of the CAP, and advocates for changing the system. However, this seems improbable at the present. (L'anglophone)
UK agriculture and environment minister, Caroline Spelman, recently chastised EU governments for their Common Agriculture Policy (CAP), because of its enormous cost in a time when government finances are looking wobbly. Spelman proposes to replace direct subsidies with income supports tied to enhanced environmental protection. Farm subsidies in the world's advanced economies are inherently unequal, and when viewed within the broader context of rising food prices, climate change, and increasing protectionism, it is clear that the current system urgently needs modification. (Reuters)
This Times article asserts that the EU “mammoth” agricultural subsidy system needs reform. In 2009, the EU distributed $70 billion in agricultural subsidies to recipients ranging from a Danish billiards club to the Queen of England. In 2003, the EU tried to discourage corporations from profiting off of EU subsidies, by stipulating that individuals who owned agricultural land could receive financial assistance. However, these reforms have clearly failed to prevent superfluous subsidies and greater change is needed. Agricultural producers argue that the EU’s agricultural subsidies unfairly skew world markets, disadvantage local producers, and drive up the price of land, forcing farmers to buy land at inflated prices and keeping them dependent. The upcoming planned reassessment of agricultural policy in 2013 must lead to subsidy reform. (Time Business)
Officials of the US and Brazil came to an agreement likely to settle a long-standing trade dispute over American cotton subsidies. The landmark agreement staves off Brazilian trade retaliation that could have cost American businesses hundreds of millions of dollars, and marks the first time a country (Brazil) has threatened the suspension of intellectual property rights with authorization from the WTO. In 2008 the WTO found the US subsidies for domestic cotton production to be in violation of global trade laws.
$100 billion a year in US and EU farm subsidies are distorting world trade and harming exporters in poor countries. This article asks if the global financial crisis presents an opportunity to get rid of these astounding distortions. Many lobbyists and politicians in high income countries obstruct efforts to reform these policies that devastate poor countries. (Africa Report)
The US agreed to reduce its agricultural subsidies by $1.4billion at a meeting of the World Trade Organization's Doha Round. In return, the US expects countries like India and Brazil to further open up their markets. But, leaders from poorer countries criticized the offer saying that the US must further reduce the negative impacts of agricultural subsidies on small scale farmers in their countries. Some world leaders and NGOs criticize US agricultural subsidies because they unfairly increase the competiveness of US farmers in international markets. (Associated Press)
Conventional economists argue that everyone will benefit if countries specialize in producing a few different food commodities and import the rest. But without any protection of the domestic market, farmers in poorer countries must compete with commodities subsidized by richer countries. As over 29 countries have restricted food exports to ensure that their people have enough to eat, the import-dependent countries have even less access to food. A group of food-importing countries is promoting an agreement in the Doha Development Round to prevent countries from unilaterally restricting exports. (New York Times)
European subsidies for agriculture are contributing to rapidly rising food prices and the destruction of small-scale farming. These massive subsidies artificially cheapen EU products, making it impossible for small-scale farmers in poorer countries to compete. Critics have long protested the way in which these subsidies distort global agriculture and trade. In light of the 2008 food crisis, the EU subsidies are under heavy fire, from poor countries who suffer most, but also from within, by EU politicians and policymakers. (Inter Press Service)
The World Trade Organization (WTO) ruled that the US continues to violate international trade rules and suppress world prices of cotton with its huge agricultural subsidies. The WTO has launched an investigation into the matter after complaints from Brazilian and Canadian governments. The US administration, on the other hand, argues that their subsidies have no considerable impact on global prices of agricultural products. (Reuters)
In this commentary, former US President Jimmy Carter urges Congress to reform the 1933 farm bill to eliminate the subsidies that accrue to the largest and richest agricultural producers in the US. The subsidies hurt both poor US farmers as well as producers in developing countries. By creating incentives for overproduction and dumping of products, the subsidies effectively push small-scale producers out of the market. (Washington Post)
This article argues that the 2007 US Farm Bill could bring some desired reforms. According to the author, the bill may reduce agricultural subsidies, open markets to imported produce from poor countries and lower food prices for US citizens. But, increased trade also produces more carbon emissions, leading many people to advocate for buying local produce. The author suggests the choice between buying locally and supporting poor countries with free trade is ultimately an ethical decision. (Policy Innovations)
The World Bank's 2007 World Development Report calls on governments to put greater emphasis on agriculture in development policies. The report says that by investing in the agricultural economy, governments can reduce poverty in rural areas, where "75 percent of the world's poor live." Growth in other economic sectors does not necessarily absorb the people living in rural areas. NGOs, such as Oxfam and ActionAid, claim that the World Bank's agricultural policies will not increase growth and reduce poverty unless rich countries cut their agricultural subsidies and lower tariffs on agricultural products. (Agence France Presse)
This Associated Pressarticle reports on the WTO talks and on the disagreement between the United States and Brazil over how much the US should cut its farm subsidies. The US said that it was willing to limit its farm subsidies to $17 billion while Brazil is asking the US for larger cuts. Farm subsidies make it impossible for poorer nations to develop their economies by selling their agricultural products abroad. Once again, it seems like there won't be a major breakthrough in these talks.
This OneWorldarticle reports on the "Alternative Summit," organized by a group of social justice and environmental NGOs to oppose the G8 Summit in Heiligendamm. Speaking at the Alternative Summit, the UN Special Rapporteur on the Right to Food Jean Ziegler called for an end to G8 summits, arguing that the world's wealthiest countries have promoted a globalization that has increased poverty among the poor. The UN representative also called for the elimination of farm subsidies by the G8 countries.
At this year's G8 summit, the heads of government will most likely not discuss their farm subsidies that prevent African nations from developing. At the 2005 Gleneagles summit, the G8 agreed to reduce agricultural subsidies but since then governments have actually increased their farm support. In the meantime, the EU has promised that it will revise its subsidies to farmers by 2013.(Inter Press Service)
The World Trade Organization Doha Development Round has been stalled since July 2006, when the US, despite demanding market liberalization in developing countries, refused to lower its own domestic farm subsidies. At the 2007 World Economic Forum, the G33 group of developing countries called for a formal resumption of negotiations, seeking a multilateral outcome that would offer "a level playing field in the global trading system." The US, however, insisted that the Doha Round not reconvene "until there is clear progress" in ongoing informal discussions, which largely exclude members of the G33. (Inter Press Service)
This Oxfam report
details the history and damaging consequences of the World Bank and IMF (International Monetary Fund) praxis of pushing privatization and liberalization reforms in poor countries, as well as the continuous failure to reform this "conditionality". The report looks closer at the case of Mali, where the World Bank has forced liberalization of the cotton industry by withholding funds desperately needed in the country's neglected education sector. The resulting exposure to the world market cotton price – significantly driven down by rich countries' subsidies – decreased the price Malian farmers received for their cotton by 20 percent in 2005. This could increase country-wide poverty by 4.6 percent, says the report.
The UN Special Rapporteur on the Right to Food, Jean Ziegler, strongly criticizes Europe's policy towards Africa. Ziegler highlights the obvious, but vastly ignored, connection between EU agricultural subsidies and the large flow of African migrants to Europe. While Europe destroys African agriculture by dumping subsidized food, Europeans want their borders closed to poverty-stricken Africans and respond with security measures to a problem which is in fact about "hunger refugees." Ziegler calls for a halt to the "deadly dumping." (AlertNet)
Despite cultivating more land than in previous years, cotton farmers in Burkina Faso earn less as raw cotton prices dropped more than 20 percent from 2004 to 2006. Cheap cotton from the US drives prices down. While Burkinabes cannot replace cotton for any other crop, the US government keeps the US cotton industry alive by giving US$1 billion in subsidies to only 25,000 farmers. With WTO negotiations collapsed and congressional and presidential elections looming in 2008, US legislators may not agree on any subsidy cuts at the 2007 Farm Bill revision. (Inter Press Service)
This Panos Londonarticle comments on the "bizarre" levels of support that go to large farms in the US and the EU. Although the UK government has publicly condemned the "scandal and waste" of the EU's Common Agricultural Policy (CAP), farm unions and alliances hold enough sway over EU decisions to prevent significant reductions in subsidies. The article suggests that these practices cause overproduction and dumping, but states that the EU will not reform the CAP unless the domestic and international public express even more significant discontent.
Following the collapse of the Doha development round, this Inter Press Servicearticle highlights the widespread support in India for the government's decision to withdraw from the Doha negotiations. Indian academics and business representatives alike agree that primary responsibility for the failure of the negotiations lies with US refusal to cut domestic farm subsidies. Unwilling to compromise and accept a deal of only reduced average customs tariffs, the Indian government seems to be assuming leadership in bringing together poor countries to demand cuts in US farm subsidies.
The author of this truthoutarticle cautions against World Bank President Paul Wolfowitz's claim that a World Trade Organization (WTO) deal to eliminate tariffs and subsidies in rich countries would help the world's poor. Although economists project a US$ 54 billion per year gain from free trade, the author sees the gain as overshadowed by negative effects on employment in import-competing industries, falling tariff revenues, and copyright standards that impede consumers' potential to purchase pharmaceuticals.
Critics of EU, US and Japanese agricultural subsidies argue that their elimination would benefit poor countries' farmers. After consulting directly with small farmers in Latin America, the author of this article warns that simply eliminating subsidies "would not be sufficient to promote rural development." In the absence of comprehensive agrarian reform that strengthens local and regional producers, cutting subsidies would mainly benefit large transnational corporations. (Inter Press Service)
The EU and the US are not the only ones worried about another possible "failure" at the Hong Kong Ministerial Conference. Many Africans worry that such an outcome would cause the most damage to their continent. African countries are trying to create a "united front" for the next negotiations. As this article points out, after expressing progressive commitments, it is also time for the US and the EU to present a concrete position. (East African Standard)
The US is the world's primary food donor. However, by dumping its surplus production on poor countries the US simply supports its own agribusiness sector. To truly tackle hunger, rich countries must allow poor countries to develop their food production. In hunger emergencies, donor countries should buy food in the region to support local agricultural production. (International Relations Center)
The EU and the US spend billions to subsidize their beef farmers, but these subsidies represent only a part of the problem of global beef trade. In 2004, the environmental impact of beef production reached intolerable levels and the expansion of cattle ranching destroyed 26000 sq km of the Amazon rain forest. The social impact is even worse: in Brazil, beef producers hire people to work in slave conditions and have been known to murder those who try to stop this destruction. Maybe, as the author suggests, "we shouldn't be eating beef at all." (Guardian)
At the World Trade Organization conference in Hong Kong, trade ministers will discuss the proposals by the Group of 20 developing countries regarding market access and domestic support, including agricultural subsidies. The G20 asks rich countries to cut tariffs about 54%, allowing poor countries to not cut more than 36%. The group also asks governments to cut up to 80% of their "trade-distorting domestic support" to achieve a fairer global trade system. (Third World Network)
According to Oxfam, the US "breakthrough offer" on agricultural subsidies would allow the US to "get away with doing next to nothing." The US proposed to cut its agricultural subsidies by only 2%, while continuing to urge poor countries to open their markets, particularly on services.
The Duke of Marlborough, a British aristocrat, receives over half a million pounds sterling in agricultural subsidies for his Blenheim estate near Oxford. At the same time, desperate Indian peasants, overwhelmed by subsidized imports and free-market reforms, commit suicide in large numbers. Rahul Rao, an Oxford-based scholar, connects Blenheim with his home city of Bangalore in India, showing a global web of institutions, policies and responsibilities that simultaneously creates wealth and destitution.
The EU's Common Agricultural Policy (CAP) has distorted trade for decades. The sugar industry illustrates the injustice of this policy all too clearly. While the EU guarantees its sugar farmers a price that is over three times the world market price, African sugar producers struggle in vain to compete in an unfair market. These subsidies, paid for by European taxpayers, mean the security of a way of life in the North, but cost millions of African jobs, causing increased poverty and malnutrition. (Independent)
This article from the New Statesmanexamines the global effects of agricultural subsidies. Although fair trade is growing, consumers "remain fixated by price, whatever the consequences." These subsidies allow rich nations to keep their agricultural goods artificially low, and thus African producers, unable to compete, are doomed to fail. Fields lie barren and unused, next to piles of US riceâ€”food aid for farmers that rich countries have subsidized out of a job.
Although wealthy states force most poor countries to halt government assistance for farms as conditions for aid and trade liberalization, these rich countries "the US and the EU states in particular"continue their subsidies, with no end in sight. The issue of agricultural grants has become a main point of contention at the World Trade Organization. The EU spends about 40 percent of its budget on trade-distorting subsidies, while only a tiny fraction of that goes into aid for countries that are impoverished by this system of financial support. (Inter Press Service)
Ministers from 30 World Trade Organization (WTO) member nations have approved the European Union proposal on how to calculate tariffs for farm products that remain a point of contention in the ongoing global trade talks. The agreement paves way for finalizing the Doha Round trade negotiations that collapsed in September 2003 when rich states refused to give in to poor countries' demands on opening borders to farm trade and cutting agricultural subsidies. (Inter Press Service)
After losing the case on sugar subsidies before the World Trade Organization (WTO), the European Union should now proceed to reform its sugar policy in a way that benefits the world's poorest countries, contends this Oxfam Internationalbriefing note. However, current European Commission proposals for sugar reform fall far short of complying with WTO rules. Oxfam calls on the EU to immediately eliminate all export subsidies for sugar, cut its own production quotas, and increase sugar imports from poor countries.
This article from Foreign Policy In Focusanalyzes the movement against corporate control of agricultural markets, focusing on the detrimental effects of subsidies, overproduction, and dumping. "The same forces that are working against farmers in Africa and El Salvador are working against farmers in Iowa," because corporate control of global agriculture affects local producers around the world. Groups like Via Campesina have mobilized the global farmers' struggle to "create a space in global agricultural politics for â€˜food sovereignty,'" fighting for autonomy over food production and local knowledge.
With the adoption of the "July Package" in August 2004, development issues largely disappeared from view in the World Trade Organization (WTO) global trade talks, argues this Au Courantarticle. By emphasizing only the issue of subsidies instead of a larger set of structural problems, the Package failed to sufficiently address agricultural dumping, which is one of the biggest bones of contention in the negotiations.
Could the infamous agricultural subsidies actually benefit consumers in poor countries by making food imports cheaper? This is what prominent economists like Jagdish Bhagwati have suggested, but the author of this Dissident Voicearticle disagrees. Cheaper imported food will not help the three billion farmers in poor countries as long as rich nations' subsidies prevent them from earning enough money to buy the imports, the author argues.
The G20 group of poor countries urges rich nations to scrap all export subsidies "as fast as possible" and no later than within five years. Poor countries have repeatedly accused the European Union and the United States of using subsidies to dump farm produce on world markets and erecting high tariff barriers to keep out cheaper exports. Aid groups believe the uniform message from G20 countries could have a lot of leverage in the run-up to the World Trade Organization ministerial meeting in Hong Kong in December 2005. (Reuters)
With the World Trade Organization having ruled US cotton subsidies illegal, it is now time to end the practice which hurts poor farmers in Africa and benefits industrial-scale producers in the US, writes the Christian Science Monitor. The paper also calls for an increase in US foreign aid to the 540 million residents of Sub-Saharan Africa who receive far less in assistance than just 7,500 US cotton farmers.
The World Trade Organization (WTO) has declared US cotton subsidies illegal in its final ruling on the issue. The case was the first formal challenge to rich nations' massive agricultural subsidies that have long impeded competitiveness of poor countries' exports. Many trade experts believe the decision also raises questions about other US and EU subsidy programs and may open a "Pandora's box" of WTO challenges against them. (Inter Press Service)
When the World Trade Organization Agreement on Agriculture came into force in 1995, governments promised farmers more trade and higher prices. Since then, trade has increased but because of rampant agricultural dumping - the selling of products at prices below the cost of production - higher producer prices are a more distant dream than ever. This Institute for Agriculture and Trade Policy research report examines agricultural dumping by US-based multinational corporations and calls for immediate action to eliminate the practice that hurts farmers all over the world.
Based in Minnesota, the IATP provides critical views of international trade policy, sustainable agriculture, biodiversity and intellectual property rights, environmental issues, and more. The site includes many valuable links to other sites in the field of international trade, trade law, and the like.
An NGO that examines agricultural subsidies and other structural problems behind poverty and injustice.
An international organization that deals with the rules of trade between its member nations.